72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3770
Senate Bill 942
Sponsored by Senator B STARR, Representative BROWN; Senators
DUKES, METSGER, Representative KNOPP (at the request of
Innovative Finance Advisory Committee)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Authorizes Department of Transportation to enter into
public-private partnerships for transportation
projects. Establishes Oregon Innovative Partnerships Program and
State Transportation Enterprise Fund. Appropriates moneys in fund
to department. Allows Attorney General to appoint special
assistant attorneys general to evaluate agreements and advise
department. Authorizes sale of bonds to finance transportation
projects. Increases pledge limit to ensure repayment of loan
guarantees.
Authorizes department to establish public-private program to
research and develop products to reduce cost of maintenance and
preservation of highways or improve highway safety. Authorizes
joint agreements between department and others for product
development.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to transportation; creating new provisions; amending ORS
367.015 and 367.060; appropriating money; and declaring an
emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + The Legislative Assembly finds that:
(1) Entrepreneurial approaches to the acquisition, design,
management and financing of transportation projects will
accelerate cost-effective project delivery.
(2) Entrepreneurial approaches can bring substantial benefits
to the public in transportation project development and
execution.
(3) Risk management is a critical component of partnerships for
transportation projects.
(4) Successful implementation of an Oregon innovative
partnership program for transportation projects requires that
risk in a project be managed and shared by public and private
sector participants, with the partner best able to control a risk
bearing responsibility for the risk.
(5) The Legislative Assembly and the executive branch of
government accept responsibility for providing predictability for
partnerships for transportation projects and for allowing
negotiated agreements to be implemented.
(6) The development, acquisition and construction of
transportation projects creates jobs and furthers economic
development in Oregon by, among other things:
(a) Increasing the economy and efficiency of public
transportation, improving the flow of commerce into and around
the state and the surrounding region, improving the
attractiveness of Oregon to new businesses and supporting the
operations and prosperity of existing businesses; and
(b) Improving the movement of people into and around the state
and the surrounding region, alleviating congestion and crowding
and reducing the burdens on existing public transportation
systems and transportation facilities. + }
SECTION 2. { + As used in sections 1 to 13 of this 2003 Act:
(1) 'Agreement' means a written agreement, including but not
limited to a contract, for a transportation project that is
entered into under section 4 of this 2003 Act.
(2) 'Private entity' means any entity that is not a unit of
government, including but not limited to a corporation,
partnership, company, nonprofit organization or other legal
entity or a natural person.
(3) 'Transportation project' or 'project' means any proposed or
existing undertaking that facilitates any mode of transportation
in this state.
(4) 'Unit of government' means any department or agency of the
federal government, any state or any agency, office or department
of a state, any city, county, district, commission, authority,
entity, port or other public corporation organized and existing
under statutory law or under a voter-approved charter and any
intergovernmental entity created under ORS 190.003 to 190.130,
190.410 to 190.440 or 190.480 to 190.490. + }
SECTION 3. { + (1) The Department of Transportation shall
establish the Oregon Innovative Partnerships Program for the
planning, acquisition, financing, development, design,
construction, reconstruction, replacement, improvement,
maintenance, management, repair, leasing and operation of
transportation projects.
(2) The goals of the program are to:
(a) Develop an expedited project delivery process;
(b) Maximize innovation; and
(c) Develop partnerships with private entities and units of
government.
(3) As part of the program established under this section, the
department may:
(a) Solicit concepts or proposals for transportation projects
from private entities and units of government.
(b) Accept unsolicited concepts or proposals for transportation
projects from private entities and units of government.
(c) Evaluate the concepts or proposals received under this
subsection and select potential projects based on the concepts or
proposals. The evaluation under this paragraph shall include
consultation with any appropriate local government, metropolitan
planning organization or area commission on transportation.
(d) Charge an administrative fee for the evaluation in an
amount determined by the department.
(4) Following an evaluation by the department of concepts or
proposals submitted under subsection (3) of this section, and the
selection of potential transportation projects, the department
may negotiate and enter into the agreements described in section
4 of this 2003 Act for implementing the selected transportation
projects.
(5) Except as provided in subsection (6) of this section:
(a) Information related to a transportation project proposed
under sections 1 to 13 of this 2003 Act, including but not
limited to the project's design, management, financing and other
details, is exempt from disclosure under ORS 192.410 to 192.505
until:
(A) The department shares the information with a local
government, metropolitan planning organization or area commission
on transportation under subsection (3)(c) of this section; or
(B) The department completes its evaluation of the proposed
project.
(b) After the department has either shared the information
described in paragraph (a) of this subsection with a local
government, metropolitan planning organization or area commission
on transportation, or has completed its evaluation of the
proposed project, the information is subject to disclosure under
ORS 192.410 to 192.505.
(6) Sensitive business, commercial or financial information
that is not customarily provided to business competitors that is
submitted to the department in connection with a transportation
project under sections 1 to 13 of this 2003 Act is exempt from
disclosure under ORS 192.410 to 192.505 until the information is
submitted to the Oregon Transportation Commission in connection
with its review and approval of the transportation project under
section 4 of this 2003 Act.
(7) The department may, in connection with the evaluation of
concepts or proposals for transportation projects, consider any
financing mechanisms, including but not limited to the imposition
and collection of franchise fees or user fees and the development
or use of other revenue sources.
(8) The department and any other unit of government may expend,
out of any funds available for the purpose, such moneys as may be
necessary for the evaluation of concepts or proposals for
transportation projects and for negotiating agreements for
transportation projects under section 4 of this 2003 Act. The
department or other unit of government may employ engineers,
consultants or other experts the department or other unit of
government determines are needed for the purposes of doing the
evaluation and negotiation. Expenses incurred by the department
or other unit of government under this subsection prior to the
issuance of transportation project revenue bonds or other
financing shall be paid by the department or other unit of
government, as applicable, and charged to the appropriate
transportation project. The department or other unit of
government shall keep records and accounts showing each amount so
charged. Upon the sale of transportation project revenue bonds
or upon obtaining other financing for any transportation project,
the funds expended by the department or other unit of government
under this subsection in connection with the project shall be
repaid to the department or the unit of government from the
proceeds of the bonds or other financing, as allowed by
applicable law. + }
SECTION 4. { + (1) As part of the program established under
section 3 of this 2003 Act, the Department of Transportation may:
(a) Enter into any agreement or any configuration of agreements
relating to transportation projects with any private entity or
unit of government or any configuration of private entities and
units of government. The subject of agreements entered into under
this section may include, but need not be limited to, planning,
acquisition, financing, development, design, construction,
reconstruction, replacement, improvement, maintenance,
management, repair, leasing and operation of transportation
projects.
(b) Include in any agreement entered into under this section
any financing mechanisms, including but not limited to the
imposition and collection of franchise fees or user fees and the
development or use of other revenue sources.
(2) The agreements among the public and private sector partners
entered into under this section must specify at least the
following:
(a) At what point in the transportation project public and
private sector partners will enter the project and which partners
will assume responsibility for specific project elements;
(b) How the partners will share management of the risks of the
project;
(c) How the partners will share the costs of development of the
project;
(d) How the partners will allocate financial responsibility for
cost overruns;
(e) The penalties for nonperformance;
(f) The incentives for performance;
(g) The accounting and auditing standards to be used to
evaluate work on the project; and
(h) Whether the project is consistent with the plan developed
by the Oregon Transportation Commission under ORS 184.618 and any
applicable regional transportation plans or local transportation
system programs and, if not consistent, how and when the project
will become consistent with applicable plans and programs.
(3) The department may, either separately or in combination
with any other unit of government, enter into working agreements,
coordination agreements or similar implementation agreements to
carry out the joint implementation of any transportation project
selected under section 3 of this 2003 Act.
(4) The provisions of ORS 383.003 to 383.027 do not apply to
any tollway project entered into under sections 1 to 13 of this
2003 Act.
(5) The provisions of ORS chapter 279 do not apply to concepts
or proposals submitted under section 3 of this 2003 Act, or to
agreements entered into under this section, except that if public
moneys are used to pay any costs of construction of public works
that is part of a project, the provisions of ORS 279.348 to
279.380 apply to the public works. In addition, if public moneys
are used to pay any costs of construction of public works that is
part of a project, the construction contract for the public works
must contain provisions that require the payment of workers under
the contract in accordance with ORS 279.334 and 279.348 to
279.380.
(6)(a) The department may not enter into an agreement under
this section until the agreement is reviewed and approved by the
Oregon Transportation Commission.
(b) The department may not enter into, and the commission may
not approve, an agreement under this section for the construction
of a public improvement as part of a transportation project
unless the agreement provides for bonding, financial guarantees,
deposits or the posting of other security to secure the payment
of laborers, subcontractors and suppliers who perform work or
provide materials as part of the project.
(c) Before presenting an agreement to the commission for
approval under this subsection, the department must consider
whether to implement procedures to promote competition among
subcontractors for any subcontracts to be let in connection with
the transportation project. As part of its request for approval
of the agreement, the department shall report in writing to the
commission its conclusions regarding the appropriateness of
implementing such procedures.
(7)(a) Except as provided in paragraph (b) of this subsection,
documents, communications and information developed, exchanged or
compiled in the course of negotiating an agreement with a private
entity under this section are exempt from disclosure under ORS
192.410 to 192.505.
(b) The documents, communications or information described in
paragraph (a) of this subsection are subject to disclosure under
ORS 192.410 to 192.505 when the documents, communications or
information are submitted to the commission in connection with
its review and approval of a transportation project under
subsection (6) of this section.
(8) The terms of a final agreement entered into under this
section and the terms of a proposed agreement presented to the
commission for review and approval under subsection (6) of this
section are subject to disclosure under ORS 192.410 to 192.505.
(9) As used in this section:
(a) 'Public improvement' has the meaning given that term in ORS
279.011.
(b) 'Public works' has the meaning given that term in ORS
279.348. + }
SECTION 4a. { + Notwithstanding any provision of sections 1 to
13 of this 2003 Act, applicable federal laws, rules and
regulations govern in any situation that involves federal funds
if the federal laws, rules or regulations:
(1) Conflict with any provision of sections 1 to 13 of this
2003 Act;
(2) Require procedures that are additional to or different from
those provided in sections 1 to 13 of this 2003 Act; or
(3) Require contract provisions not authorized by sections 1 to
13 of this 2003 Act. + }
SECTION 5. { + (1) At the request of the Department of
Transportation, the Attorney General may appoint special
assistant attorneys general for the purpose of evaluating
partnership agreements entered into or to be entered into as part
of the program established under section 3 of this 2003 Act. The
special assistant attorneys general shall be under the direction
and control of the Attorney General and may:
(a) Advise the Department of Transportation concerning the
legality of specific proposed partnerships;
(b) Advise the department on legal procedures and practices
related to implementation of specific projects that use a
partnership;
(c) Assist the department in negotiating partnership
agreements;
(d) Assist the department in preparing any document related to
a specific partnership;
(e) Advise the department regarding accounting, investment and
tax requirements applicable to specific projects that use a
partnership; and
(f) Advise the department regarding any relevant federal
securities or other laws and related disclosure requirements.
(2) When the Attorney General, as part of the review under ORS
291.047, reviews an agreement entered into under section 4 of
this 2003 Act, the Attorney General shall:
(a) Recognize that the agreement is the product of a
partnership; and
(b) Defer to the business judgment of the department and the
Oregon Transportation Commission concerning the assignment of
risks and the incentives provided within the agreement. + }
SECTION 6. { + (1) The State Transportation Enterprise Fund is
established separate and distinct from the General Fund. Interest
earned by the State Transportation Enterprise Fund shall be
credited to the fund.
(2) The following moneys shall be deposited into the State
Transportation Enterprise Fund:
(a) Proceeds from bonds or other financing instruments issued
under the provisions of sections 1 to 13 of this 2003 Act;
(b) Revenues received from any transportation project developed
under the program established under section 3 of this 2003 Act;
and
(c) Any other moneys that are by donation, grant, contract, law
or other means transferred, allocated or appropriated to the
fund.
(3) Moneys in the State Transportation Enterprise Fund are
continuously appropriated to the Department of Transportation for
the purpose of carrying out the provisions of sections 1 to 13 of
this 2003 Act and implementing all or portions of any
transportation project developed under the program established
under section 3 of this 2003 Act.
(4) Moneys in the State Transportation Enterprise Fund that are
transferred from the State Highway Fund or from any one of the
sources that comprise the State Highway Fund as specified in ORS
366.505 and that are revenue under section 3a, Article IX of the
Oregon Constitution, may be used only for purposes authorized by
section 3a, Article IX of the Oregon Constitution.
(5) The department shall establish a separate account in the
State Transportation Enterprise Fund for each transportation
project that is undertaken under the program established under
section 3 of this 2003 Act. Except as provided in subsection (4)
of this section, the department may pledge moneys in the State
Transportation Enterprise Fund to secure revenue bonds or any
other debt obligations relating to the transportation project for
which the account is established.
(6) Moneys in an account established under subsection (5) of
this section shall be used as provided in any agreement
applicable to the transportation project for which the account is
established. + }
SECTION 7. { + (1) In addition to any authority the Department
of Transportation has to issue and sell bonds and other similar
obligations, this section establishes continuing authority for
the issuance and sale of bonds and other similar obligations in a
manner consistent with this section. To finance any
transportation project in whole or in part, the department may
request that the State Treasurer issue revenue bonds on behalf of
the department. Revenue bonds authorized under this section
shall be issued in accordance with the applicable provisions of
ORS chapters 286 and 288. The bonds shall be secured by a pledge
of, and a lien on, and shall be payable only from moneys in the
State Transportation Enterprise Fund established by section 6 of
this 2003 Act and any other revenues specifically pledged to
repayment of the bonds. Such a pledge by the department of its
revenues creates a lien that is valid and binding from the time
the pledge is made as provided in ORS 288.594. Revenue bonds
issued pursuant to this section are not general obligations of
the state and are not secured by or payable from any funds or
assets of the state other than the moneys and revenues
specifically pledged to the repayment of such revenue bonds.
(2) Moneys received from the issuance of revenue bonds or other
debt obligations, including any investment earnings thereon, may
be expended:
(a) For the purpose of financing the costs of the
transportation project for which the bonds are issued;
(b) To pay the costs and other administrative expenses of the
bonds;
(c) To pay the costs of credit enhancement or to fund any
reserves determined to be necessary or advantageous in connection
with the revenue bonds; and
(d) To reimburse the department for any costs related to
carrying out the purposes of the program established under
section 3 of this 2003 Act.
(3) Any transportation project may be financed in whole or in
part with:
(a) The proceeds of grant anticipation revenue bonds authorized
by 23 U.S.C. 122 and applicable state law.
(b) Grants, loans, loan guarantees, lines of credit, revolving
lines of credit or other financing arrangements available
pursuant to the Transportation Infrastructure Finance and
Innovation Act under 23 U.S.C. 181 et seq., or any other
applicable federal law.
(c) Infrastructure loans or assistance from the Oregon
Transportation Infrastructure Fund established by ORS 367.015.
(4) As security for the payment of financing described in
subsection (3) of this section, the land that is part of or
related to the transportation project and the revenues from the
project may be pledged, but no such pledge of revenues or
security constitutes in any manner or to any extent a general
obligation of the state. Any financing described in subsection
(3) of this section may be structured on a senior, parity or
subordinate basis to any other financing. + }
SECTION 8. { + (1) The Department of Transportation or a unit
of government may accept from the United States or any of its
agencies such funds as are available to this state or to the unit
of government for carrying out the purposes of sections 1 to 13
of this 2003 Act, whether the funds are made available by grant,
loan or other financing arrangement. The department or unit of
government may enter into such agreements and other arrangements
with the United States or any of its agencies as may be
necessary, proper and convenient for carrying out the purposes of
sections 1 to 13 of this 2003 Act.
(2) The department or a unit of government may accept from any
source any grant, donation, gift or other form of conveyance of
land, money, other real or personal property or other valuable
thing made to the State of Oregon, the department or the unit of
government for carrying out the purposes of sections 1 to 13 of
this 2003 Act.
(3) Any transportation project may be financed in whole or in
part by contribution of any funds or property made by any private
entity or unit of government that is a party to any agreement
entered into under section 4 of this 2003 Act. + }
SECTION 9. { + (1) Notwithstanding ORS 367.020, the Department
of Transportation may use moneys in the Oregon Transportation
Infrastructure Fund established by ORS 367.015 to ensure the
repayment of loan guarantees or extensions of credit made to or
on behalf of private entities engaged in the planning,
acquisition, financing, development, design, construction,
reconstruction, replacement, improvement, maintenance,
management, repair, leasing or operation of any transportation
project that is part of the program established under section 3
of this 2003 Act.
(2) The lien of a pledge made under this section is subordinate
to the lien of a pledge securing bonds payable from moneys in the
State Highway Fund described in ORS 366.505, the State Tollway
Account established by ORS 383.009 or the State Transportation
Enterprise Fund established by section 6 of this 2003 Act. + }
SECTION 10. { + The Department of Transportation may exercise
the power of eminent domain to acquire property, rights of way or
other rights in property for transportation projects that are
part of the program established under section 3 of this 2003 Act,
regardless of whether the property will be owned in fee simple by
the department. + }
SECTION 11. { + An agreement among the Department of
Transportation and other units of government may create a new
district, or designate a previously existing district, that
includes any or all of the territory within the geographic
boundaries of any or all Oregon counties in which a
transportation project is located, and may require that all
revenues from franchise fees, other user fees or other revenue
sources collected within the district in connection with the
transportation project be used exclusively for the benefit of the
district. + }
SECTION 12. { + (1) The Department of Transportation and any
unit of government that participates in a transportation project
may establish advisory committees to advise the department or the
unit of government with respect to transportation projects. An
advisory committee shall consist of not fewer than five and not
more than nine members, as determined by the department. Members
shall be appointed by the department, or in a manner agreed to by
the department and any participating unit of government.
(2) At the request of the department, an advisory committee may
review concepts or proposals for transportation projects and
submit recommendations to the department or the participating
unit of government.
(3) An advisory committee shall meet as necessary at times and
places fixed by the department or the participating unit of
government. The department shall provide personnel services to
assist the advisory committee within the limits of available
funds. An advisory committee may adopt rules to govern its
proceedings and may select officers. + }
SECTION 13. { + The Department of Transportation may adopt any
rules it considers necessary to implement the provisions of
sections 1 to 13 of this 2003 Act. + }
SECTION 14. { + (1) The Department of Transportation shall
establish a public-private partnership research and development
program.
(2) As part of the program established under this section, the
department may enter into joint research and development
agreements for the purpose of developing products for market that
may reduce the cost of maintenance and preservation or extend the
useful life of the state's highways or that may improve highway
safety. The department may enter into agreements with the
following:
(a) Individuals.
(b) Businesses.
(c) Nonprofit organizations.
(d) The State Board of Higher Education.
(3) The department may enter into agreements under subsection
(2) of this section that allow the department to obtain royalties
or other financial benefits from the sale or use of products
developed through the public-private partnership research and
development program.
(4) Moneys that the department is authorized to spend on
planning and research may be used for development of products
under this section.
(5) The department shall adopt rules that govern the
solicitation and selection of product development projects that
will receive funding under the program established under this
section. + }
SECTION 15. ORS 367.015 is amended to read:
367.015. (1) There is established in the State Treasury,
separate and distinct from the General Fund, the Oregon
Transportation Infrastructure Fund. All moneys in the
infrastructure fund are continuously appropriated to the
Department of Transportation for the purposes of ORS 367.010 to
367.067.
(2) The Oregon Transportation Infrastructure Fund shall consist
of:
(a) Moneys appropriated to the infrastructure fund by the
Legislative Assembly.
(b) Moneys transferred to the infrastructure fund by the
department from the State Highway Fund or from other funds
available to the Oregon Transportation Commission.
(c) Moneys from any federal grant, state grant or other grant
that are deposited in the infrastructure fund.
(d) Proceeds of infrastructure bonds.
(e) Earnings on the infrastructure fund.
(f) Moneys paid to the department in connection with
infrastructure loans or infrastructure assistance.
(g) Any grants or donations made to the State of Oregon for
deposit in the infrastructure fund.
(3) Moneys in the Oregon Transportation Infrastructure Fund
shall be used solely to:
(a) Provide infrastructure loans and infrastructure assistance;
(b) Pay the principal of, interest on and redemption premium,
if any, on infrastructure bonds, fund reserves for infrastructure
bonds, purchase credit enhancements for infrastructure bonds and
pay the costs of issuance and other costs related to
infrastructure bonds; { - and - }
(c) Pay the department's costs of administering the
infrastructure fund and providing infrastructure loans and
infrastructure assistance, including any costs of monitoring
transportation projects and obtaining repayment of infrastructure
loans and infrastructure assistance { + ; and
(d) Ensure repayment of loan guarantees or extensions of credit
as provided in section 9 of this 2003 Act + }.
(4) The department may establish separate accounts in the
infrastructure fund for infrastructure loans, infrastructure
assistance, the funding of infrastructure bond reserves, debt
service payments for infrastructure bonds and related costs,
administrative and operating expenses or any other purpose
necessary or desirable for carrying out the purposes of ORS
367.010 to 367.067. The commission may adopt rules that govern
how the infrastructure fund and its accounts shall be used. The
infrastructure fund or any of its accounts may be held by an
escrow agent or bond trustee.
(5) The department shall administer the infrastructure fund.
Moneys in the infrastructure fund, with the approval of the State
Treasurer, may be invested as provided by ORS 293.701 to 293.820
and the earnings from such investments shall be credited to the
account in the infrastructure fund designated by the department.
SECTION 16. ORS 367.060 is amended to read:
367.060. (1) The Department of Transportation may pledge not
more than { - $10 million - } { + $50 million + } to ensure
the repayment of loan guarantees or other extensions of credit
made to or on behalf of municipalities to finance transportation
projects { + or to ensure repayment of loan guarantees or other
extensions of credit as provided in section 9 of this 2003
Act + }. The lien of a pledge made under this subsection is
subordinate to the lien of a pledge securing bonds issued under
ORS 367.605 to 367.670.
(2) If, during a fiscal year, the moneys in the Oregon
Transportation Infrastructure Fund are insufficient to cover any
claims by financial institutions that arise from loan guarantees
or other extensions of credit made under ORS 367.010 to 367.067,
the department shall transfer, as often as necessary or
appropriate in that fiscal year, moneys from the State Highway
Fund to satisfy such claims. However, a transfer of moneys from
the State Highway Fund otherwise required by this section shall
not be made if:
(a) The transfer will reduce the moneys in the State Highway
Fund to an amount that is insufficient to pay the principal and
interest that will fall due during the fiscal year on outstanding
bonds issued under ORS 367.226 to 367.242 and 367.550 to 367.600;
or
(b) The transfer relates to a claim arising out of a
transportation project for which moneys in the State Highway Fund
may not be used under section 3a, Article IX, Oregon
Constitution, and ORS 366.505.
SECTION 17. { + This 2003 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2003 Act takes effect on
its passage. + }
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